Barclays Stockbrokers launches new Investment Note

Confidence in the FTSE 100 is on the rise, according to research from Barclays Stockbrokers. Nearly half of investors (48%) believe the FTSE will begin to recover in the next six months, and nearly a third (29%) believe it will happen in a year. However, the poll did reveal caution remains among some investors; one in six (16%) believe the recovery in the FTSE is at least two years away. As confidence in the FTSE is growing, Barclays Stockbrokers has launched the FTSE 100 Defined Returns Investment Note to allow investors to capitalise on this market sentiment and the stretch for generating above market return.

The Investment Note enables investors to receive a defined return of 13.5% for each year that the plan is in force even if the FTSE 100 index does not rise significantly . The Investment Note has a term of up to five years, and automatically matures on the first anniversary where the FTSE 100 index is at the same level or higher than the Initial Index Level. If the Note has not previously automatically matured, it offers 100% return of capital unless the FTSE 100 Index has fallen by more than 50% during the term and the Final Index Level of the FTSE 100 is lower than the Initial Index Level at maturity. In that case investors will receive a 1% reduction in capital for each 1% that the Index is below the starting level.

The FTSE 100 Defined Returns Investment Note is available exclusively from Barclays Stockbrokers until 17 February 2009, with the opportunity to invest from as little as £500.

Barbara-Ann King, Head of Proposition at Barclays Stockbrokers says: "Despite volatility dominating financial markets throughout the past year, it is encouraging to see nearly half of our clients predict recovery in the FTSE over the next six months. Those investors who are cautious about the timescale of this recovery but appreciate the need to put their money to work may achieve return through Barclays Stockbrokers FTSE 100 Defined Returns Investment Note.

"Finding tools to manage cash effectively is a more challenging proposition for many investors, coupled with the continued uncertainty around time horizon for attractive returns, positions this product well to provide an opportunity to make potentially attractive returns provided that the FTSE 100 is at or above its starting level on one of its anniversaries over the next five years. We believe this offers our active but generally more cautious investors a compelling proposition in today's market.

"This Note complements the FTSE 100 Accelerated Returns Issue 2 launched by Barclays Stockbrokers in December which offered enhanced returns over a 5 year term. With the expectation that the automatic maturity is likely to kick in on one of the anniversary dates the FTSE 100 Defined Returns Investment Note offers the opportunity to also potentially capitalise on short term movements in the index. "

Although the Note has a maximum term of five years, an automatic early maturity feature may lead to the investment coming to an end on any of the four anniversaries prior to the end of the five year investment period. Should the Investment Note redeem early, investors will receive the total nominal value along with a return of 13.5% multiplied by the number of years the Note has been in force.